The price of your site
 

There have been several post on this board of webmasters who wanted to sell their porn site. Everytime this resulted in a discussion of what a site would be worth and what a fair selling price would be. The $1 offer posts were useless of course... Anyhow I've read a few times that the site would be worth 6 times the monthly profit.

I think that's not a fair price at all. Example when you sell your site for 6 times the monty profit:

Profit each monht: $10,000
Selling price: $60,000

The person who would buy the site will make a profit of $120,000 after 1 year. Then the ROI (return of investment) is ($120,000/$60,000)*100%=200%

Imagine 200% in 1 year that's unbelievable high. The interest rates in the USA are not higher than 1.5% at the moment! Of course I know that there are more risks with investing your money into a porn site than into a savings account of a bank. But if you do a good auditing you can eliminating the risk to an acceptable risk.

In the "normal world" companies get sold for about 8 times the annual profit. In my example that would mean 8 * 120,000= $960,000 And I don't think there should be a big difference with porn companies/sites. Porn is almost recession-proof.

Let me know if you aren't convinced and why. The people who are convinced can bid on my site now :)

We're not in the "normal" world... things work differently in this place... in the "normal" world, when a company is sold, that usually includes the office, the gear, and the employees as well... selling a porn site is VASTLY different in this regard. Easy enough to see.

yeah but everyone in America knows (those of us with attorneys) that tgps will be a thing of the past very very soon with the political powers in office.

Why do you think people are selling?
There is a reason for it.

Hell is coming.

Diabetic Rage has been saying this and warning people for months.

But Bone...there will always be TGP v3.1 and that will satisfy any laws enacted :winkwink:

eros

Trust Jesus.
He will set you free.

Everyone seems to think their stuff is worth the most... from people wanting an excessive amount of $$$ when selling their sites, to content providers that think they're justified in selling at $1.50+ per pic. Me? Yeah, I think the same thing too.

I can't be assed to discuss this, but online porn has been around for a while, however... its only been strong since around late '96 early '97. Each year, it is diluted more and more. A 100k site surely doesn't make as much money now as it did a few years ago... cheaper internet access lets 'poorer' people onto the net, more free porn, more competition, etc etc.

A site is worth what the owner thinks it is worth, but only to the owner themself... for everyone else, its worth what they are willing to pay for it. Eight times yearly profit is extreme... not to forget, this online porn thing has only been strong for around 5 to 6 years... if you're Nike, 8 times yearly profit may be cool because people aren't ever going to lose their feet. If the business is something like Color Climax or Private, then 5 to 6 years may be all good. But for online porn, the 6 month rule is based on a balance of risk, and urgency of sale.

Nobody in their right mind would pay 8 years profit for a porn site. :2 cents:

1. I'm not talking about TGP's only, although I don't say they should be valued with other standards.
2. > "office, the gear, and the employees as well"
yes it's different but that doesn't have to mean that it's less worth. What about all the custom software which many companies have develloped for their site, all the hours work in design etc. And employees only cost hugh amounts of money. The less employees you have the better. And you must see this relatively of course. The internet business is a computer based business with that I mean that 1 person can make more turnover-profit than in almost any other business. This is of high value and that's something what should pay for. So yes it's another kind of business with other kind of assets, but that doesn't have to mean that they should be valued different.

Nothing will change as to say put a end to things....Until Visa & Mastercard just flat out say no to running CC for Porn Sites.


That is where the money comes from. TGP's, Search engines ect.......... Will still be here like the rest of us. The rules have always been there about the Rape, Beast and CP. Meaning don't sell it or link it.

im wondering if the Anal Hobbit would be considered a "beast"?

Me either.
yes you are.
That's exactly what it means... how can this be confusing to you? Less assets come with the sale = less value = less overall WORTH. Do you know what "Worth" means? It's not some fabricated figure these people just keep dreaming up because they like the way the number looks. "My site is worth $6,000... blah blah blah..." Well I say to those people, fine... PROVE it. Don't tell me something is worth what someone will pay for it... that's bullshit. Worth is based on concrete things... not somebody's IDEA of how much they LOVE their site.
If it's included in the sale, then the WORTH of the sale increases. If it doesn't... it doesn't.
These types of things are EXPENSES... NOT ASSETS.
okay... now your boat is beginning to sink..... you started off strong,... (sort of I guess....) but you're going down in flames with this line of thinking.
Again... yes it does. You people need to read up and start using terms like VALUE and WORTH appropriately. This is not make-believe land. You can't just slap a number on something and declare that as it's worth.

Yes that's true, you earnings per 100k uniques are much lower then a couple of years ago. But in the meantime you could have mutliplied your traffic by 100 times. A site who received 5000 uniques a day 3 years ago, can have 500,000 uniques now. And whith good automation your profits can be much higher. The big players do have a higher value than the small ones.

Yes the risk certainly plays a major role. You take as example Nike, but that's not completely fair as Nike is valued at 30 times Price/Earnings. Internet Research companies are reporting that most surfers don't search that much anymore, but are only using their bookmarks. If you don't do any stupid things you can keep your visitors for a long time. And I don't think that online porn will be gone in 10 years. You know how long there are already Adult video stores? And humans always would like to see porn.......

Ok Amputate here something else:

Let's say you want to make 25% ROI and are positive about the online porn industry in the next 2 years. (In my opinion the risks are very low by looking forward for only 2 years.) In that case you can value the price of a site too. And I take my first example again:

240,000/X * 100% = 25%
=>
0.25X = 240,000
=>
X = 960.000

That means a value of $960,000 by an annual ROI of 25%

ok, but you also have to factor in the reality that this is so completely different from any other business, by way of.... you can't just go out and put up a campus with buildings and start competeing with Dell computers tomorrow.... but everyone and their little sister can make a porn site in an afternoon. What that means is, sure, your site may actually be worth alot more than you're ever going to get for it simply because it doesn't take a rocket scientist or a degree in ANYTHING to start one.

Bottom line is, you'll never see those kinds of ratios for an adult site sale.... ever. UNLESS..... the technology changes so drastically that only a handful of people are further able to actually create sites. THEN, and only then will you start to see some major increases in selling price ratios. In fact, I'm utterly astounded by some of the prices I see sites going for NOW, given the wide open availibility to create until you collapse.

So if I were to sell all my sites, I'd have to pay like 60$ to the person who takes them. Anyone?:321GFY

You have a point here, but I will explain. Small sites aren't worth a shit at all. And your site must have a history. Sites which only exist for for a couple of months are much less worth then a site which is already running for years.

When you have your own company and want to get a PRIVATE loan from a bank your chances to get it are much bigger when you can show a profit record of 3 years then one of only 1 year.

When you buy a business you're buyng an income stream. It doesn't matter whether it comes with furniture and equipment or not. The buyer is going to pay some multiple of the annual profits.

This is a risky business with a lot of uncertainties. I wouldn't want to have to wait very long to recoup my investment if I was buying a site.

Whereas, if I was buying the local Pennysaver or something I'd be willing to pay 6 times profit for a nice 17% annual return.

LOL

A site is worth what someone will pay you for it...I could make up all kinds of numbers, but unless someone will write the check, it's all bullshit....:winkwink:

but if he puts on a hat, no one will notice.shit, my biggest paysite has been around (and profitable) for 5 years. it has 11K+ members, killer bw deals, killer hardware to handle the bw, several *million* unique visitors a day, killer exclusive video content (shot exclusively for the site) with better production values than anything else on the net. blah, blah, lots of other stuff too long to mention here.

3 employees + myself. roughly 135K/month net profit to date. no need for 8 years profits lol. I'd sell it for 24 times monthly profit, no problem. any takers? ;)

If you find a big enough company who has the money then I don't see a problem. I only doubt or you really own this site as I don't know (m)any pay sites which are getting several *million* unique visitors a day. There's only a problem if you are (one of) the biggest then it's almost ipossible to find a party who can pay such an amount of money. There aren't many companies who can buy General Electric, but that company is still valued at a price/earnings ratio of about 25.

Free ones -

I was one of the people that said that I wouldn't pay more than 6 months profit. I picked up that figure from a very very very influential and long standing webmaster in this industry. It's a great figure.

One reason it's good - is because there is some risk that you won't be able to run the site the same way the person you bought it from does. So there could be several months that you break even ... and you could even kill the site before turning things around. (this has happened to me) (But the opposite happens too...where you make a lot more than the previous owner).

Another reason - is that the industry is capable of taking wild swings - while this is something that is outside of your control... it's something you have to accept.

And the last reason ... is one that you just pointed out... there is a difference between new sites (2 years old...and established ... 5 years old)... if they could justify spending more... because they have been open for 5 years... have soo many surfer email addresses, have this and that software, have webmaster email addresses and contact lists... and a wealth of content... of course the price could get rachetted up... that's what Amp was trying to tell you... that ASSETS INCREASE the VALUE of a company. many companies don't value their assets...or think about them...and so you can get domain names, content, email addresses and the like as an extra BONUS.

I'm not going to argue with a guy that will give me really cool shit for free.

~Brett

the long and the short.... try for 6 months profit... if they can make a good case for increasing the asking price beyond that... evaluate it on a case by case basis...

you can doubt all you like. i have detailed stats on all traffic (including raw logs) and revenue (ibill) + wire details. or i would never have mentioned it. i'm quite far from a fucking idiot. the actual number is about 2.6 million uniques per day total traffic. not 2.6 M to the paysite's front page lol.

i've gotten several offers, but only one that actually has the cash to purchase (they offered 20 times monthly profit after taking a look at things). however, they want me to manage the site and traffic for 6-8 months after the sale - i am not terribly excited about selling in that fashion.

i am not working to sell at all. it's just something i think about and would be interested in doing, if the price was right.

That's what I thought you meant and made me doubt

just figguring a little math here as something just doesn't add up to me, you say it gets several million uniques a day and only 11,000 members. hummm. something smells fishy here

I'm going to assume you do recurring billing from other posts you made - rule of thumb is 3 months on recurring billing so that would be just under 4,000 members new a month from 2 million uniques/day.
please correct me if I'm wrong here.

2 million uniques/day is about 60 millions hits a month. and you said UNIQUES TOO - not TOTAL hits.
4000membersper month/60,000,000,000 total hits is a conversion ratio of 1/15,000?


one in 15,000!


one in 15,000!


please correct the math or just let us assume that you have the WORST converting programs on the face of the planet.


:)

for the 2nd time, that is total traffic across the entire network. out of the 2.6, about 2.2 has a chance to get to the front page. after qualifying, roughly 5% of the traffic see the paysite.

or about 110K uniques/day.

I average about 210 signups/day. = 1:524 conversion ratio. absolutely no trials - full month signups only. i don't run a 'program'. all sales are 100% ours - no payouts to other webmasters what so ever.

again, after all costs, i pull in 135 - 140 K/ month Net Profit. yes, it's pretty bad lol.

2.2 has a chance? what is this - sounds like a TGP submitter with his own paysites or the like.....

sigh, because i send off a small amount of my traffic to other programs. duh.

are you interested in buying? or do you just want me to post some stats again?

I think he was talking on hits on his galleries..
So that is 1 signup per 15K hits on the galleries which is quite good if it is all TGP traffic.


And I think a TGP that makes 10K a month is worth over 60K$
I'm not a pro but I think 12 times the profit you can make per month would be more reasonable.
It's not about the office but about the name.

It seems to me the more uncertainty there is, the faster you would want to recoup your investment. With today's climate, you could buy a website today and be out of business or in jail tomarrow.

If I were buying a website I would not pay any multiple for the monthly profits.

The only way I would buy would be an assets-only purchase. I would buy the domain, the content, the site design, html, scripts, servers, etc and price each item separately and add it up. The seller can keep his corporation and all his liabilities. I don't want people the seller screwed over that he forgot to tell me about coming after me.

Assets-only purchase is the only way to buy a business.

Hoops I was reading the whole post before I answerd and sleazy his post was the last I readbefore I answerd

noone buys without understanding the stats. IF is is gallery traffic that your sales are comming from what exactly would you be selling other than a couple months renewals?

Since he does not have trails I think he has a movie site.
A good movie sites can keep it's members for longer then 3 months.

i am not interested in selling my site on gfy. that's funny. having said that:

(a) if you are actually interested - [email protected]
(b) you can't afford my site if you are hoping to learn how to make 80K month from pk.
(c) my traffic comes from 3 areas: traffic i purchase (404, prequalified, etc), tgp/mgp, and se.

content is the highest quality *only*. could be used across all your paysites. our exposure is extreme to say the least. ask soul rebel, he knows my sites.

but i'm not trying to sell to you, and you're not going to buy. i posted as a joke. which anyone trying to sell a large paysite on gfy would be.

Some things to think about when considering a site for sale:

Sites are based on domain names, which you can't really own, but only rent (miss a payment and it will soon belong to someone else).

How transferrable is your content? Does it belong to the seller or the domain? Has the provider put any restrictions on transfer?

In other words, when you sell a site, what is really yours to sell?

Exactly.... and so many people seem to think that all the components of their site is theirs to just do with as they damn well please. Some truly ARE in that situation.... MOST aren't. This is where the lesson of KNOW YOUR BUSINESS WELL comes into play.... there are essentially 2 types of people in business... those that know their business extremely well and operate it that way on a 24 hour clock in every possibly scenario from routine daily tasks to even an ultimate sale of the business....

and those who repeatedly make ridiculous mistakes and don't ever understand why the world is laughing. Like the guy selling an avs front along with all the rights to the content that doesn't belong to him. HELLO.....!!! McFly!!!!

this all seems painfully obvious.

sadly though... it seems it's not to many....

it is painfully obvious bro.... that's why I hafta beat my head on the freakin' wall everytime I see some dumbass with a disclaimer on his site saying "All these images are believed to be in the public domain and blah blah blah... email me if you want them removed"... it makes me laugh so hard I cry.... yet they still don't understand why...

painfully obvious, yes.... but apparently not common enough to be put into the common sense bin.

One factor noone has mentioned yet ( I think) is that many porn businesses are run very poorly.

So if you buy a site that is grossing 10k a month then apply experience and business skill to running it, you may come up with a pretty sweet deal even based on a 4 or 5 times multiple.

I heard of one deal about 3 months ago where a paysite was bought on the value of the monthly income, small site. The buyer, who I know, knew all along that the content was worth 10x as much in his hands because he knew how to market it.

matty

just trying to make sense of the numbers is all. Oh, yes I am hoping to learn how to make $80K/month, but to qualify that, I'm hoping to learn how to make 80K/month from a site that gets under 200K/day (uniques) now. Something we BOTH would like to know I'm sure.

I have purchased several sites recently for substaintial amouts of money. Once a guy proves he can make a penny or two it's not hard to find investors.